Example of Functional Requirements Document

A functional requirements document (FRD) is a critical tool for business analysts. It outlines the key functions a new system, product, or process must perform to meet the needs of users and stakeholders. Well-written functional requirements serve as the foundation for development and testing and they help ensure the final deliverables solve the right business problems. This comprehensive guide will show you how to describe clear, actionable functional requirements and it will provide a simple example of functional requirements document. Follow these best practices and your documents will set your projects up for success.

What Is a Functional Requirements Document?

A functional requirements document defines what a new or updated product should do from the standpoint of the end user. It outlines the key functions and capabilities that the product must have in order to meet the needs of its intended users.

In simple terms, the FRD articulates the product’s functionality – what it will do. It serves as a guide for developers and architects in bringing the product vision to life technically. The FRD acts as a bridge between business needs and technical solutions by translating desired product capabilities into specifics that can be coded and implemented.

For example, a functional requirement for a website might be: “The system shall allow users to log in with a unique username and password.” This defines the functionality without prescribing exactly how it should be built.

How does a FRD differ from a BRD?

Business requirements documents (BRDs) center on strategic objectives, business processes and user needs at a high level. They communicate what problem needs solving, whereas the FRD details the functionality to address those needs. FRDs add increasing levels of granularity so that software teams understand the capabilities the product must deliver.

Functional requirements documents play a pivotal role in aligning business goals with system development. They provide just enough detail – the critical functions, inputs and outputs – for technology teams to craft solutions that fulfill the vision. With clear FRDs, organisations can release products that meet real user needs.

Why Is an FRD Important?

Clear functional requirements are critical to the success of any technical project. An FRD prevents misunderstandings, reduces delays, and acts as a benchmark for development and testing.

Without detailed documentation, projects risk miscommunication, uncontrolled changes in scope, and inability to meet objectives. For example, a study by IAG Consulting found that unclear requirements were a leading cause in 56% of project failures.

An FRD mitigates these risks in the following ways:

Prevents Misunderstandings: The FRD provides a common reference point for all stakeholders – from business leaders to developers – ensuring alignment on what the product must do. This eliminates confusion about the breadth or limits of the work.
Reduces Rework: By defining requirements upfront, changes mid-development are minimised. This prevents wasted effort from building the wrong features or unnecessary capabilities.
Enables Testing: Detailed specifications in the FRD function as acceptance criteria. The product can be objectively evaluated against these metrics, ensuring quality.

Simply put, companies that invest in solid FRDs are far more likely to complete projects on time, on budget, and with higher customer satisfaction. One analysis found that organisations with excellent requirements practices met project goals over 3x more often than those with poor disciplines.

By clearly defining functional needs, FRDs act as the foundation for developing products that solve real business challenges. They are a key ingredient for project success.

So What Are Functional Requirements?

Functional requirements describe what a system should do. They capture the intended behaviors, operations, and interactions. Functional requirements do not specify how the functions will be delivered – that is covered in technical specifications.

Functional requirements documents answer the “what” questions:

What tasks should the system or product perform?
What data or information should it store?
What calculations should it do?
What other systems should it interface with?

Key Elements of a Functional Requirements Document

A complete FRD contains the following elements to guide the development process:

Business Requirements – The business requirements establish the context and objectives of the project. This section answers why the product is needed and what problems it will solve. For example, the business goal might be automating manual payroll processes to reduce human error and speed up the payment cycle.

Functional Requirements – The functional requirements make up the meat of the document. This section lists the specific features, capabilities, data flows, integrations, and other functions that the product must perform or support.

Some examples include:

User Authentication: The system will require users to login with a valid username and password.
Data Validation: All entries into the system will be checked against predefined validations. Invalid entries will trigger error messages.
Reporting: The system will generate standard payroll reports viewable in PDF format. Users can customise report parameters like date range and employee filters.

User Roles and Permissions – This section outlines any necessary user roles, their hierarchy, and their corresponding levels of access to system functions. For example, a payroll system might define Admin, Manager, and Employee roles with cascading permission levels.

Use Cases – Use cases illustrate how users will interact with the system to accomplish key tasks. They demonstrate realistic step-by-step flows through the system. For instance, an e-commerce FRD might describe the use case of a customer booking a flight, including search, seat selection, user account verification, payment processing, and booking confirmation.

Assumptions and Constraints – The FRD lists external factors, limitations, and dependencies that influence the project. For instance, development may be constrained by budget restrictions, availability of certain technologies, interoperability with other systems, or compliance factors. Documenting assumptions and constraints guides reasonable solution planning.

Non-Functional Requirements – Non-functional requirements define system attributes such as security, performance, availability, and maintainability. You can read more about NFRs here.

A Simple Example of Functional Requirements Document

1. Introduction

Purpose: This document details the functional requirements for a project management tool designed to improve task tracking and collaboration.

Scope: The application will allow users to create projects, assign tasks, and monitor progress through dashboards and reports.

2. System Overview

The system aims to provide an intuitive interface for teams to manage projects efficiently. Key features include task assignment, progress tracking, and team communication.

3. Business Requirements

The business requirements define the high-level objectives that the project management application must achieve.

Examples:

Improve task tracking by providing real-time visibility of task statuses to project managers and team members.
Enhance collaboration through a centralised platform for communication and document sharing.
Reduce project delays by automating reminders and notifications for deadlines and overdue tasks.
Support data-driven decision-making with dynamic dashboards and detailed reporting capabilities.

4. Functional Requirements

The system shall allow users to create, update, and delete tasks.
Users shall receive email notifications for task updates.
The dashboard shall display project progress using Gantt charts.
The system shall allow file uploads up to 10 MB per task.

5. User Roles and Permissions

Project Manager: Full access to project settings, tasks, and reports.
Team Member: Access to assigned tasks and comments.
Viewer: Read-only access to project details.

6. Use Case Example

Title: Assign a Task
Actors: Project Manager, System

Steps:

Project Manager logs in.
Manager selects a project and clicks “Assign Task.”
Manager enters task details and assigns it to a team member.
System sends a notification to the team member.

8. Assumptions and Constraints

Assumptions:

Users have access to reliable internet connections to use the application effectively.
All users have basic knowledge of project management concepts and tools.
The application will primarily serve small to medium-sized teams (up to 100 users per project).

Constraints:

The maximum file upload size is limited to 10 MB per task due to storage constraints.
The application will support only English in the initial release.
Integration with external tools (e.g., calendars, file storage) will be limited to pre-defined APIs.

7. Non-Functional Requirements

The system shall load dashboards within 3 seconds.
The application shall be accessible on mobile devices.
The system shall maintain 99.9% uptime.

Comprehensive examples of non-functional requirements are provided here.

How to Write a Functional Requirements Document

Creating an effective FRD requires collaboration, clear communication, and careful organisation. Follow these steps to produce FRDs that set your technical projects up for success:

Collaborate with Stakeholders – Schedule interviews and meetings with all project stakeholders – including end users, customer representatives, business leaders, and technical teams. Discuss their needs, challenges, and vision for the product. Capture all inputs to inform the FRD.
Use Clear and Concise Language – Write requirements clearly and concisely, free of ambiguity. Use simple language that all stakeholders can understand. State what the system shall do, not how it should do it.
Organise Logically – Organise requirements in a logical structure based on priority, system components, user roles, or other groupings that aid understanding. Use section headers, numbered lists, and visual formatting for scan-ability.
Visualise Workflows – Supplement complex requirements with diagrams, flowcharts, and screenshots to illustrate user interactions and system workflows. A picture speaks a thousand words.
Review with Stakeholders – Circulate the draft FRD for stakeholder review. Incorporate their feedback to ensure the document correctly captures needs. Achieve sign-off before design commences.

Writing great FRDs requires teamwork, clear language, thoughtful organisation, and review. With an excellent FRD, your team can confidently build technology solutions that solve real business problems.

Writing Clear, Actionable Functional Requirements

The key to excellent functional requirements is clear, precise language. Follow these guidelines:

Use the active voice and avoid ambiguous terms like “enable”, “flexible”, or “user-friendly”.
Include concrete details like required data inputs, rules, and expected outputs.
Start sentences with strong action verbs like calculate, validate, reject, generate, or send.
Avoid pronouns like “it” or “this” that create confusion about the subject.
Use consistent, defined terminology. Maintain a glossary if needed.
Structure related requirements into logical groups for readability.
Prioritise each requirement (e.g. mandatory vs. optional) to focus development efforts.

Here are two example requirements demonstrating this clarity:

The system shall validate that all required fields are populated before allowing the user to submit the form. Required fields include name, date of birth, address, and phone number.
Upon successful submission, the system shall display a confirmation message verifying the form was received. It shall then send a welcome email with account credentials to the email address provided in the form.

Verifying Requirements through Validation

Precise validation criteria ensure requirements are testable and verifiable. Effective criteria:

Map each requirement to its validation method like inspection, analysis, demonstration, or test.
Specify precise expected outcomes that fulfill the requirement under defined conditions.
Outline detailed steps to carry out each validation test or check.
Align criteria with development team testing procedures and acceptance plan.

With well-defined validation criteria, you can confirm that delivered solutions satisfy all functional requirements.

How to Prioritise Functional Requirements Effectively

Prioritising functional requirements is a critical step in planning any technical project. With clear priorities, development teams know which features and capabilities to focus on first to maximise business value. Proper prioritisation aligns product roadmaps with strategic goals, prevents scope creep, and enables organisations to deliver the most impactful functionality faster. Using ranking methods like MoSCoW, product managers categorise requirements as essential, important, or “nice to have.” This process also fosters stakeholder alignment on which functionalities matter most. Rather than trying to deliver hundreds of requirements at once, teams tackle high-priority features incrementally to get the product to market quicker.

Here are some tips for effectively prioritising functional requirements in a business analysis project:

Align with business goals – Requirements that directly map to critical business objectives and outcomes should be highest priority. Understand what the stakeholders aim to accomplish.
Identify dependencies – Some requirements cannot be delivered until others are completed first. Map dependencies between requirements to determine priority order.
Classify by necessity – Categorise each requirement as essential, important, or nice-to-have. Essentials get top priority.
Evaluate cost vs. value – Requirements that deliver significant business value at a relatively low development cost tend to be higher priority.
Assess risk – Requirements that reduce major technical risks or have regulatory/compliance implications often take precedence.
Consider frequency of use – Features that the end users will interact with constantly are usually more critical than rarely used functions.
Get user input – Request feedback from user representatives on which requirements they view as most important or valuable.
Divide large requirements – Break down complex requirements into smaller chunks to deliver value incrementally.
Balance functional vs. non-functional – Don’t ignore key non-functional requirements like security, reliability and performance.
Re-evaluate often – Requirements priorities often shift over the course of a project. Continuously re-assess relative priority.

Effectively prioritising requirements requires weighing all of these factors to determine the optimal sequencing that delivers the most business value early while managing risks. This helps ensure the project team focuses their efforts on the most critical functions.

Common Challenges in Writing an FRD

While FRDs power successful delivery, they are not always easy to write well. Avoid these common pitfalls with some practical tips:

Lack of Stakeholder Input – Without perspectives from all stakeholders, requirements can miss the mark. Schedule plenty of upfront meetings and review cycles to gather feedback from users, executives, and project teams. Develop the FRD collaboratively.
Ambiguity in Requirements – Unclear, vague, or subjective requirements lead to mismatched expectations. Requirements should be precise, measurable, and testable. Use concrete language rather than ambiguous terms like “user-friendly” or “high performance.”
Scope Creep – When the boundaries of a project aren’t clearly defined, scope creep can derail budgets and timelines. Explicitly state what is in and out of scope in the FRD. Set expectations on what will be delivered in later phases to prevent bloat.

Writing high-quality FRDs without hassles comes down to structured collaboration, clear language, and defined project boundaries. Keep these best practices in mind to create FRDs that set your projects up for on-time, on-budget success.

Key Takeaways for Writing Functional Requirements

A strong functional requirements document is critical to the success of any technical project. Well-defined FRDs empower development teams to deliver solutions that truly solve business problems and delight end users. When requirements are unclear, project teams operate in the dark, building products that fail to meet stakeholder needs. The consequences are serious – missed deadlines, ballooning costs, diminished quality, and products that miss the mark. Companies that invest in detailed FRDs reap the rewards through smoother implementations, faster deployments, and higher customer satisfaction. The effort to create excellent functional specification pays dividends throughout development cycles and product lifespans. For any organisation seeking to build technology that satisfies real needs, strong FRDs are an indispensable part of a winning formula.

Therefore, when you are writing the FRD ensure that you:

Clearly explain what the system or product must accomplish for users.
Use active voice, specific details, and consistent terminology.
Document edge cases, exceptions, inputs, outputs, and all system responses.
Prioritise requirements based on business needs.
Develop validation criteria to test whether requirements are fulfilled.

By following these best practices, functional requirements will set a project up for success by ensuring the delivered solutions solve the right business problems.

Conclusion: Example of Functional Requirements Document

A well written functional requirements document is a project manager’s friend and a developer’s guiding light. Excellent FRDs distill end user needs into concrete system capabilities to guide engineering teams. They prevent miscommunications that lead to budget overruns and products that miss the mark. But realising the full benefits of FRDs requires mastery across both art and science. Successful project leaders collaborate cross-functionally, communicate with clarity, carefully translate needs to functionality, and incorporate stakeholder feedback iteratively. When done right, FRDs enable organisations to consistently deliver technology solutions on time, on spec, and on budget. Mastering the creation of functional requirements documents separates the visionaries from the dreamers and unlocks innovation that solves real problems for real people.